Construction projects account for a relatively large percentage of the United States economy. Construction projects can be dissected into discrete phases, such as a planning phase, a tendering phase (i.e. request for bids phase), a letting and/or job awarding phase, a bid wind down phase, a financing phase, a procurement phase, construction management phase, a deliverable approval phase, an awarding of occupancy phase, and a punch out phase and a closing phase. Administration of each phase is no small task and typically required an army of skilled personal.
More specifically, the planning phase can include engaging a relator, and finding a suitable piece of land, locating an acceptable architect, finding an engineering firm 110 to create the drawing package and finding a liaison to obtain plan approval from the appropriate governmental entities. It can be appreciated that, for even a medium sized construction project there are many entities to be coordinated and many decisions to be made in each stage and sloppy administration and miscommunications can be very costly for management of a construction project from “cradle to grave.
It can be appreciated that, just the task of efficiently tender a request for bids on many construction projects requires many issues to be addressed where a failure in this phase can be extremely costly the owner. Thus, inefficient construction management is often very costly because there are many important issues in each phase, which if not properly addressed or if not addressed in a timely manner, can double or triple the cost of each stage. For example, in the biding stage if issues such as what qualifications will be required of general contractors, auditors, architects, engineer and sub-contractors are not well defined, if how the tendered documents will be accessed by a prospective bidders, what a prospective bidder will be required to provide, what the bonding requirements will be, how addendums will be administrated, when, where and how the bid will be let, how the permitting will be administrated, how the contractors will be paid, how the project will be financed and hundreds of other large and small issues are not appropriately addresses the cost of the finished project can become grossly over budget.
In view of the complexity of administrating a construction project, most would agree that a flexible tool that would allow for the efficient administration and management of the bidding process alone could and would save an owner a significant amount of money. It can also be appreciated that there is no “one size fits all” process that will provide efficient and effective management and administration for each and all phase of a construction process because each owner, each project and each phase will have specific needs, circumstances and requirements.
For example, if the owner of a construction project is a private entity, as opposed to a government or quasi-government agency, many additional considerations need to be managed and administered, for example meeting minority quotas, the openness of the project data, building code requirements to be met etc. Non-compliance with the legal requirements for a construction project and monitoring thereof, can prove expensive and even disastrous if not documented and attended to. It can further be appreciated how different a process for administrating a private construction project is than the process for administrating a construction project for a state run agency. Regardless of the entity (i.e. private or government) administrating and managing building and improvements to, infrastructure complex, inefficient and expensive and if administration and management lacks and proper procedures or if the proper procedures are not followed, serious costs and liability can result.
As eluded to above, in a common scenario when an entity, such as owner wants to build improvements, or desires construction services the owner will hire a realtor to find land and an architect to develop a concept that meets the entity's needs. In turn, the architect may hire an engineering firm to do the engineering and then the architect will distribute or publish a request for bids or provide a package of tender documents (Specifications, Drawings and Addenda) to prospective bidders, often general contractors. However, to comply with the law, to be fair to bidders and in order to select “the best” bidder, and save money in all phases, many processes and regulations have to be defined and followed by all involved parties. In many scenarios, the government has strict guidelines for various aspects of the overall project and it is very important that all of these guidelines are complied with. If the bidding, awarding and building process is not properly monitored and administrated and not in compliance, expensive lawsuits between one or more parties often results.
Currently, state of the art competitive bid processes utilized in the construction industry require general contractors, subcontractors and suppliers alike to generate and hand deliver hard copies or paper documents to the architect, prior to the time of bid letting. The general contractor typically receives and assembles quotations/offers/bids from numerous subcontractors, bonding agencies, and suppliers, and then reviews these documents, compiles a bid, reviews the bid for completeness and accuracy and then appoints an employee to drive to a specified bid letting location often hundreds of mile away from the general contractors office to timely submit a completed bid for a project. This process costs every general contractor who bids thousands, if not tens of thousands of dollars for each project bid. Then, if a general contractor's has an error, is incomplete or is not timely filed, the bid will not be accepted or approved by the bid administrator eliminating any chance that the general contractor might recouping the time and expense invested in the bid. Thus, a bid package with a simple error or defect can result in a general contractor loosing ten thousand dollars with no hope of recovery of such an expense.
As part of this process a general contractor must painstakingly acquire all bids from all required subcontractors, material suppliers etc., a sufficient time in advance of the bid deadline such that the general contractor can review and compile all of these sub-bids and put all of the pieces of the finished bid together, print the entire bid out on paper, then get the bid timely delivered in person to the architect who after determining if the bid meets the minimum requirements will open the bid.
Thus, in a typical bid letting process, the general contractor will hand deliver a paper bid at a location indicated in the instructions to bidders prior to a specified day and time. After the deadline for bid submission has passed, the administrator will not accept any bids. When an architect is the bid administrator an architect will typically open the bids one by one, insuring that the bid meets the critical requirements. For public construction projects, after opening a bid, the architect will proceed to read aloud each bid received and opened. Typically, the bid courier or delivery person stays for the letting and records what the bit letting data on a bid tabulation sheet. The representative would then drive many miles back to the office to disclose the results to the principals of the construction company.
It can be appreciated that the current manual bidding system requires a general contractor to send a competent person, often for a full work day, to deliver the bid often driving several hundred miles to deliver the bid and return with results. Accordingly, the bid delivery process alone often costs a general contractor from five hundred to over a thousand dollars on bid day due to wages, travel expenses and loss of production. It would be beneficial to have a paperless construction project administration and management system that could set up, monitor, manage and administrate a construction process saving time, money, resources, and the environment.